by
Duncan Macfarlane | Jun 10, 2014
Description:
Gold Coast retiree Bevis Frances has been an investor all his life. His investments with wife Sharon have ranged from the Hendon Hotel in Adelaide and Gold Coast restaurants, to the stock market where Bevis was an early investor in nickel explorer Poseidon NL during the 1960s mining bubble (he escaped with a profit). Bevis has even owned race horses.
Today, he is more cautious with his money, with most of his portfolio in bonds, although he still uses an active trading strategy to boost his returns. Below, Bevis tells us about his investment strategy, his best and worst investments, and what he would do with a windfall if he received one tomorrow.
What was your first investment and how did it go?
One of the first investments was way back in 1969. It was exciting times with a nickel boom on. I bought shares in Poseidon at 90c and I sold them the next day for $1.40. I made over 50% and thought I was a genius but then they went to $450.00 each! That was one of my best and worst trades all in one. It was craziness.
They say that when the taxi drivers start tipping its time to get out but back then even the tailors were tipping. I owned race horses at the time and my veterinary surgeon’s brother in-law rang him. His tailor gave him a tip on a mob called Tasmanex that shot up and then shot down. Some newspaper photographers had flown over their holding in WA and reported they were drilling. But it turned out the poor buggers were just drilling for water - they were thirsty.
What is the best piece of investment advice you have received and who was it from?
I was a fan of Rene Rivkin’s. I’d been to his seminars. His advice on the share market was always very good and I learned a lot from him. He once said the most asked question he gets is “when should I sell.” And the answer that he gave, and the one I still use today is “when you’re happy.” Once you’re happy and you think you’ve made enough. If you’re going to leave some on the table for someone else so be it. That’s when to sell.
What is your best performing investment?
I had a free holiday in the Mediterranean this time last year. We did a 28 night cruise, we had 5 nights in Barcelona, seven days in Dubai, and that all came out of Swiss RE. I bought them after the financial crisis meltdown but when they were on the way back up. People brag about how they picked the bottom but I think they’re more lucky than clever.
And worst?
My worst investment was Merrill Lynch shares. They were bounding around and I was buying them and selling them and then they just crashed out and I got caught holding them. One of the hardest decisions to make is to sell when you are down. Everybody hates a loss. I was thinking this will blow over. Merrill Lynch will never go away. So I went to zero on that one.
What proportion of your portfolio is in fixed-income?
About 70%. I have fixed, floating and inflation linked bonds. The remaining 30 per cent I put in the stock market.
Do you pursue a particular strategy?
Even with the bonds, being a share trader over the years I can’t help myself but trade the bonds as well. There’s some I hang on to but I do tend to trade them. I’ve been in and out of Qantas about four times. I only sell when I’m making a profit on my capital.
What are you hoping to achieve personally through investing?
Everybody’s got a different outlook. A bloke in his 30s has a different outlook to a bloke like me in his 70s. I’m quite happy now to not be empire building. I’m looking for lower risk and steady income and the money I make I’m happy to just spend it if I want to. Return of capital to me is as important as return on capital these days if not more important.
Where do you get your information about investing?
Nowadays from the Internet and my mobile phone. I use Bloomberg and the Sydney Morning Herald financial page.
How did you start investing through FIIG?
I went to an introductory seminar at Tweed Heads and was immediately comfortable with the personnel and the education. That was two years ago and I’ve enjoyed a profitable relationship since then.
How would you invest $100,000 if you were given it tomorrow?
I’d probably invest it in that new bond that FIIG have got, AAPT. It’s in Australia. It’s senior secured. It’s a fixed-rate. We’re in a world with a low interest rate and it doesn’t look like rising any time soon. I think something as secure as that, with a good return compared to a bank term deposit will probably have good capital growth on the basis that interest rates will probably stay at their current lows.
Do you have a personal finance budget and do you stick to it?
No, but I’ve always lived within my means.
What is the most extravagant purchase you have made?
A BMW convertible for my wife. It came with a big pink ribbon. That was when we sold out of business. We didn’t have any gold watches so she got a BMW. She was overjoyed.